Open Future NZ "Be the change you want to see in the World"
Mahatma Gandhi
Company Learning Rate by John S Veitch
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We have this idea that we can be successful by building an innovative company.  Surely this is the key to building an "Open Future©".  Sadly the evidence for success in this common business strategy is weak.  No company can change at the speed of the market.   Companies that are led by, "big men" tend to be the least able to adapt.  Competitive advantage is always short lived.  In this sense, no business is sustainable.  

For instance Foster and Kaplan took as a sample the 500 companies chosen by Standard and Poor for the S&P Index in 1957.  Forty years later only 74 were left.  With a much larger sample, Wiggins and Ruefli found that high performance was virtually always short lived.  Of 6772 companies over a 30 year period, only 5% performed well for ten years or more.  Only 32 were successful for 20 of those 30 years.  Why is this?  

The market is a open system.  Open systems have a diversity of activity no firm can emulate.  Many people are working hard to make their own visions "real".  Maybe 90% or more of them fail.  Each one making exploratory steps, taking risks, learning new things.  This is necessary work, even though success is a long shot.  The WORK, prepares the mind, opens the imagination to see in new ways.  Failure, that follows a good try, generates new learning and the opportunity to succeed another day.  That's the innovative engine driving an open market.  

Where this work occurs outside of the company, the costs of learning and failure is also external.  The knowledge gained is also beyond the firewall.  The company invested nothing and gained nothing.  Most of the people engaged in this sort of activity are members of at least one community of practice.  They will occasionally talk about their work.  Perhaps seeking help, perhaps offering advice.  Members of a community of practice get to know who has particular types of knowledge.  Communities of practice may be sources of new ideas, sources of expertise, a place to find new employees, and sometimes the source of a new product or service.  

Somehow each company needs to increase it's learning rate.  City life helps that to happen.  This is our age of enlightenment, and the pressure of life in cities, the rubbing together of many life strands, produces increased creativity and innovation.  One way to increase the company learning rate is to engage in city life.   But we can do better.  There is a hot-house of ideas on the Internet, in social networks and in communities of practice.  Bring "the enlightenment" to your company by connecting strongly to that.  

Encourage a diversity of ideas.  By definition diversity requires, overlap, redundancy, free time, excess capacity, the resources to experiment, and the freedom to fail.  The unintended consequence of high operational efficiency and budgetary control is to drive out diversity.  Cut your people some slack.  

Train and develop prepared minds inside the company.  Use the existing public networks.  Run private groups too, but don't reinvent the wheel, use the open system.  Encourage the idea of resource sharing.  Make the maintenance of written records easy, by doing it online.  

Engage many people in intense debate and innovation.  Create or encourage the development of internal "hot-houses".  Find people who are natural leaders of such groups and resource them to be more active.  Use these groups to drive learning and cooperation.  This will be the engine for innovation and change.

It's essential to penetrate the facade of polite agreement around the table.  Only in an open discussion are the members of a team exposed to what other people are really thinking.  Until we are directly asked, we may not know what we ourselves really think on the issue.  

There are well tried action learning processes that every executive should know, and every firm should master.  The most well known is the four step Deming Wheel, but there are many versions, often with five or six steps.  If you are not using action learning principles, make the effort to do so.

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